When £1 is not £1

Gabriel Stein examines the risks from introducing a CBDC should its value diverge from that of physical currency and bank deposits

Most central banks in advanced and emerging economies are researching and discussing the introduction of so-called central bank digital currencies (CBDCs).1

The reasons for this vary. In some countries, eg, Sweden, the central bank is concerned the use of cash will diminish to a point where the public no longer has access to central bank money. Should this occur, Sveriges Riksbank fears it could have negative effects on the economy and might, in a crisis, cause problems in the payments system

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